Suppose some factor of production is expected to produce significant revenue in the future but must be paid for today. If a new factory will product $10 million in revenue over the next 10 years is it worth $10 million of this year's dollars to build it?

    Of course the answer is no. But a factory which can produce $10 million in new revenue is worth building at some price. The sort of question we want to tackle here is: How much should we spend today to earn a stream of revenue of $10 million over the next 10 years?

    You won't be surprised to learn that the answer is " it all depends." The good news is we can tackle the question anyway.

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